First-Time Buyer Guide: Tackling the Basics of Buying a House

First-Time Buyer Guide: Tackling the Basics of Buying a House
July 24. 2021

As professional mortgage brokers, we understand how you feel. Buying a house is a confusing and difficult process for a first-time buyer like yourself. Fortunately, it’s also easy.

You see, as a first-time buyer, you have a lot of tools and assistance programs at your disposal that isn’t available to other buyers. And, today, we’re going to teach you all about these options and how to qualify for them.

Furthermore, we’re going to walk you through all the basic steps required for your first home purchase. Everything you need to know is right here in this guide. Read on to learn more.

1. Are You Really a First-Time Home Buyer?

First of all, the phrase “first-time homebuyer” is not a generic reference to any person who is buying a house for the very first time. It’s a specific legal term that qualifies certain individuals for various assistance programs.

Particularly, you qualify as a first-time homebuyer if you meet any of these criteria.

  • You have not owned a principal residence in at least 3 years
  • You have co-owned a home with a former spouse who you are no longer married to
  • You have owned a home that is not a permanent installation, such as a mobile home
  • You have owned a home that doesn’t meet local building codes and would cost more to fix than it would to construct a new building

If you don’t meet any of these criteria, then you cannot qualify for any first-time homebuyer incentives.

2. First-Time Buyer Incentives

First-time buyer assistance options vary by state. This resource from the U.S. Department of Housing and Urban Development can help you discover what options are available to you.

Additionally, lenders and other institutions will offer their own incentives to first-time buyers. Our American Dream Grant/Down Payment Assistance Program is a good example.

3. Build Your Savings

Now, qualifying for first-time buyer incentives is great and all. But it doesn’t automatically mean that you’re financially ready to buy. Even with all the assistance you can get, you’ll still need savings built up for closing costs.

Also, you’ll need to pay for a home inspection before you decide to buy. And don’t forget about moving expenses, either.

Furthermore, what if your car breaks down in the next few months? Unexpected expenses such as this can put you behind financially, and at the worst possible time, too.

That is, if financial trouble hits you now, you could end up losing the house. Prevent this from happening by having at least a few thousand dollars saved up before you start shopping for a house.

4. Build Your Credit

Next, most big lenders won’t approve a mortgage for those with lower credit scores. So, if you have low credit scores, or no borrowing history at all, you need to fix that.

To start, you need to know what your credit score is. If you don’t know, get a credit report.

You can do this once every 12 months for free at This is the only official, federally-authorized website where you can do this. Obtaining your free credit report will have no negative impact on your credit, either.

To build credit, you need to prove that you can borrow responsibly. Do this by borrowing money and paying it back on time. For instance, take out a loan for your next home improvement project or put it on credit.

Don’t pay it back too fast, either. Lenders want to see that you’re reliable at paying back debt in monthly payments.

Most importantly: never miss a payment. Aside from defaulting, being late on payments is the worst thing you can do to your credit.

5. Have a Reliable Source of Income

Lenders also want to see a long-standing record that shows that you have a reliable source of income. If you’re financially secure now, it’s likely you won’t have a problem making your monthly mortgage payments, either. So, basically, don’t quit your job right now if you’re planning to buy a house.

6. Hire a Real Estate Agent

Do you know the state of the housing market in your area right now? It’s important that you find out.

For instance, if it’s a seller’s market, house prices might be unreasonably high at the moment. And who knows how current real estate trends will affect home prices over the next few months?

Your real estate agent knows, that’s who. Since you’re new to the home buying process, you need a local real estate agent to guide you through it. They know the market in your area and the best and worst times to buy.

And they don’t waste time. After all, the longer it takes you to buy, the longer it takes them to get paid. They’ll find the right house for you, at a price you can accept as quickly as possible. Your real estate agent works closely with your lender to understand your loan program and structure.

8. Compare and Consult With Lenders

Next, you need to contact mortgage lenders to compare your options. Find out how much each lender will lend you, the interest rate percentage they offer, and whether or not the rate is fixed. Also, calculate how much the monthly payment will be to make sure you can afford it. Remember that interest rates are based on each borrower credit profile and other factors.

9. Look For a House

Finally, it’s time to shop for a house. First, you need to decide what features you need and the square footage you can afford. After that, your real estate agent and lender will help with the rest to make this an easy process.

Remember This First-Time Buyer Guide

Now that you know what steps to take, get started today. Keep this first-time buyer guide bookmarked and follow these steps to find and purchase the perfect home. Also, if you found this guide helpful, please share it with your friends and family.

If you need additional help, that’s what we’re here for. Contact Market Place Mortgage now for a free consultation. We’ll answer your questions and provide you with the tools you need to buy your first home.